Plan for binding 'prenup' agreement

A so-called "prenup" law that allows a couple to set the terms of a divorce before they get married has been put forward by the Government's law reform advisers.

Under the current law, couples can make pre- and post-nuptial agreements but they are not binding and the parties cannot be certain they will be upheld.

A report from the Law Commission, Matrimonial Property Needs and Agreements, includes a draft Bill which, if implemented, would bring legally-recognised "qualifying nuptial agreements" into effect.

They would enable married couples and civil partners to make a binding agreement about how their property or finances should be shared if their relationship breaks down, the Commission said.

Professor Elizabeth Cooke, Law Commissioner for property, family and trust law, said: " Pre- and post-nuptial agreements are becoming more commonplace but the courts will not always follow them and lawyers are therefore not able to give clear advice about their effect.

"Qualifying nuptial agreements would give couples autonomy and control, and make the financial outcome of separation more predictable. We have built in safeguards to ensure that they cannot be used to impose hardship on either party, nor to escape responsibility for children or to burden the state."

As part of a package of measures, the Commission has also recommended that the Family Justice Council, the non-statutory advisory body made up of representatives from the family justice system, produces guidance on financial needs.

Guidance would explain the outcome a judge would aim for in determining a settlement, including achieving eventual financial independence.

Ms Cooke added: "We believe that married couples and civil partners should have the power to decide their own financial arrangements, but should not be able to contract out of their responsibilities for each other's financial needs, or for their children.

"The measures we are recommending would help couples understand and meet their financial responsibilities and, where appropriate, achieve financial independence."

Slater & Gordon family lawyer Amanda McAlister said: "The Law Commission recommendations are to be welcomed for their potential to reduce conflict and costs for those who are seeking to end their marriage or civil partnership.

"But it is vital that any changes in this area must recognise that family law, and particularly divorce and separation settlements, are inherently complex - a couple with no children who is seeking to end their marriage or civil partnership after five years will have very different needs to those who have been married for 15 years with three children.

"So long as we avoid a one-size-fits-all approach to this area of the law and continue to recognise that every couple, and indeed family, is different, then I think these recommendations could potentially lead to a smoother and more cost effective separation process for many couples."

Marilyn Stowe, senior partner at Stowe Family Law, said: " These measures are perfect. They are tempered. While the Law Commission does not recommend radical change, it has recognised what family lawyers already know.

"Because of the economic situation and the Government's demolition of family law legal aid, fewer people are able to access professional legal advice. As a result, confusion abounds and it is now necessary to provide additional information and 'simplify' the current system."

She added: "Although the Law Commission is recommending that prenuptial agreements should become binding in law, it also proposes rigid criteria.

"For example, a prenup would only be binding once both partners' financial needs and financial responsibilities towards their children had been met. This means that an unscrupulous spouse would be unable to 'contract out' of providing for their children."

Jane Keir, senior partner and international families lawyer at Kingsley Napley LLP, said: " We have long been squeamish about giving nuptial agreements contractual force.

"There have been fears they undermine the institution of marriage, fail to protect the vulnerable and, in the most extreme of circumstances, may leave the state to support a penniless ex-spouse.

"But we may now, at last, be on the threshold of welcome change.

"Qualifying nuptial agreements should be enforceable while limiting a judge's discretion over any change to the intended outcome.

"Never before has English law gone quite so far.

"We urge Parliament not to miss this opportunity to allow couples greater certainty and pre-agreed financial control should their relationship disintegrate."

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